TRADE DISABILITIES.

Evening Star, Issue 18035, 1 August 1922, Page 4

TRADE DISABILITIES.

It is apparently a long way ta-stabilisa-tiou of trade. Since the armistice a great deal has been done in the reduction of tho first cost of goods, or in a reduction of the profiteering of those who handled them. During tho poet-armistice , boom long-standing deficiencies in tho delivery of goods imperatively needed were made up, and as tho edge was then taken off a keen demand the prices as a general rule receded, not to tho old levels, perhaps, but after a certain amount of seesawing to something like permanence on a rather higher level, though, there have been, of course, exceptions. That was partial stabilisation. But trade is hot yet anything like back to normal. Except where Government control lingers on, the old law of supply and demand has resumed

its sway, with some differences. Because of the impoverishment of tho world as a whole, the demand is not what it used to lie, and) tho consequent reduced volume of trade is still further handicapped by Government interference, quite apart from Government control. This is'exercised by a number of departments, but chiefly through the Customs. The. -wedding of arbitrary power to tho desire to extract the last penny of revenue has given birth to tactics whiijh are most harassing to merchants. Thoughbuying from tho same source overseas, even at the same, price, they find variations in the landed cost of their goods which aro most perplexing and irritating, 'Die spirit of enterprise is killed by this feeling of uncertainty. Instead of Targe orders being placed, they aro distributed in crumbs, and this hand-to-mouth style of business, adding ns it docs to overhead charges, seems likely to continue until traders know exactly where they are. Confidence can only return when tho old law of supply and demand has much more untrammelled play than at present. Tho contention in business circles is that the Government would save much more than tho extra revenue derived from the fine tooth comb process by tho cessation of tho salaries of tho extra assistance required in its application and by tho increased receipts which a larger volume of unrestricted trade would yield l —to say nothing of tho avoidance of those losses which the State is suspected of having incurred dn its speculations in controlled commodities, the financial results of which have not so far been indicated to or apparently even sought by Parliament, though tho session has already run some weeks of its course.

Of perhaps greater magnitude as a factor, and one in somo degree arising out of restrictions imposed by the Government, is tiro, question of transport. This particularly afllicts the South Island. Shipping services are unsatisfactory and freights arc high. Here wo are apparently within the circumference of the same sort of vicious circle so often quoted in connection with wage levels and the cost of living. Tho argument of the shipping companies seems to bo that freights would be lower if more frequent and regular services could bo run, and that the only reason these are not instituted or restored is that they would not bo justified by the business offering. Large numbers of vessels arc laid up, and those still in commission presumably have to earn enough to pay interest on this capital lying idle as well as on that in active employment. This burden, added to the present high operating costs, necessitates hi"h freights. Merchants, on the other hand, reply that so long as the cost of transport bears so high-a ratio to the intrinsic value of tho goods that might bo carriecMie volume' of sea-borne trade must inevitably ho confined to absolutely minimum dimensions. It appears to be a case of pull devil, pull baker. So far this tug-of-war has been remarkably even kand long drawn out. Somo outside factor is needed to upset this expensive equilibrium, and business men are hopeful that this factor will bo found in trade reciprocity between Australia and New Zealand. If it comes to tho fruition now promised it will in a sense be a removal of State interference with trade. As far as. can bo ascertained, hopes are chiefly pinned to renewed shipping activity springing from tho timber trade between the South Island and Australia.. It is reported that the West Coast timber milling industry, which has been in a somewhat lethargic state for a time, is talcing on. already a much more busy aspect in expectation of a big outlet across the Tasman Sea. This would keep employed a regular shipping service to Australia, absorbing some of the vessels now out of commission. It would at least form a starting point from which it'is reasonable to expect that other sendees would develop. It is very opportune that just .at this time there are independent movements in Invercargill, Dunedin, and Christchurch to secure hotter shipping services to the South Island porta, and that there is a good prospect of these independent movements merging into combined pressure to secure what is wanted. So far Canterbury appears to be in the best position, should trade spring up between Greymouth and Australia, or will bo when tho MidlandRailway is opeared for traffic at the end of this or early next year. But it is reassuring to see that Canterbury would not ho satisfied with that connection alone. At a meeting held yesterday it was decided that the Canterbury Progress League and the Chamber of Commerce should get into touch with kindred bodies throughout tho South Island to bring pressure on tho Government and the Union Steam Ship Company to remedy the neglect under which the South Island suffers as a wbolej Hitherto tho answer has been that if more vessels were put on they would be far in excess of the cargo offering. A general answer to this might be that such is the world-wide experience at present, and 1 that tho fault chiefly lies in tho charges imposed by shipping. But now a more specific answer can be given in the excellent prospect held oat of back loading from Netv Zealand to Australia from this island, tho absence of which in late years has, wo understand, been the great obstacle to the restoration of the old) connections.